Commodity channel index
Measures how far price has moved from its statistical average, used to identify cyclical turns and overbought/oversold extremes across virtually any asset.
What the numbers mean
The lookback sets how many bars form the average that price is measured against, scaled so that roughly 70–80% of readings fall between −100 and +100. A 20-period CCI on a daily chart is the common default; shorter settings push more readings outside those bounds.
- 20 — the standard lookback; scaled so 70–80% of readings fall within ±100
- 14 — a faster setting that reaches the bounds more often
- ±100 — the conventional thresholds, read two different ways (see below)
- ±200 — treated as genuinely extreme
How it is used
Read either as a reversal tool — above +100 overbought, below −100 oversold — or, in the trend-following reading, as a breakout signal where a push through +100 marks a move with enough strength to join.
- Reversal reading → above +100 overbought, below −100 oversold; fade in ranges
- Trend reading → a push above +100 is a breakout to join, not to fade
- Zero-line crossings → the shorter-term trend changing sign
How it relates to everything else
CCI is unusual in that its two standard interpretations are opposite instructions, and which one applies depends entirely on whether the market is trending. That makes a trend filter not optional: ADX above 25 argues for the breakout reading, below 20 for the fade.
- CCI + ADX → decides which of its two readings to use
- Behaves much like RSI in ranges but has no fixed upper bound
- Multi-timeframe CCI (weekly for direction, daily for entry) is a common setup
What to watch for
Those two readings are opposite instructions, so the choice has to be made in advance based on whether the market is trending or ranging. Despite the name it has nothing specific to do with commodities.